Silver Price, January 31: Record Run Fueled by Solar Boom, Supply Gap
The silver price has surged to a record $117.69 per ounce after breaking $100, outpacing gold even as gold topped $5,000. Safe-haven buying, a softer dollar, and rising industrial use, led by solar, are key drivers. For Swiss investors, global bullion is quoted in USD, while returns in CHF also reflect currency moves. With a supply deficit persisting and momentum strong, the rally looks supported but stretched. A low gold-silver ratio signals rising volatility risk into 2026, making position sizing and risk control essential.
What Is Driving the Record Rally
The silver price has benefited from safe-haven flows tied to geopolitical tension and rate-cut hopes that softened the dollar. A weaker greenback often lifts USD-priced commodities. As gold made new highs, silver followed with higher beta, attracting momentum capital. Media coverage highlights the outsized move and investor rotation toward real assets, including this Tagesschau analysis.
Solar demand is now a central pillar for silver. Photovoltaic cells require silver paste, and rising installations have tightened available supply. Grid upgrades and EV-related electronics add to consumption, lifting the industrial share of demand. This broad base helps the silver price respond not only to macro drivers but also to manufacturing trends, supporting higher floors even when speculative interest cools.
Refined output and recycling have not kept up with multiple years of strong demand, leaving a structural deficit. That gap has forced drawdowns from inventories, making the market more sensitive to positive surprises. The silver price can therefore move sharply on modest demand upticks or supply hiccups, especially when positioning is crowded and liquidity is thinner during off-peak trading hours.
Reading the Gold-Silver Ratio and Positioning
The gold-silver ratio has fallen to a multi‑year low, a sign that silver’s outperformance is stretched. Historically, very low readings often precede consolidation or rotation back toward gold. While no single metric times the market, the ratio offers a useful dashboard for judging whether the silver price is running ahead of fundamentals in the short term.
Futures and ETP inflows indicate momentum participation. That is positive for trend durability but raises reversal risk if macro data shift. In 2026, thinner inventories and fast algorithmic flows could amplify swings. We expect wider intraday ranges and more event-driven gaps, making stop placement and staggered entries important for anyone trading the silver price.
We suggest sizing silver as a satellite holding within a diversified commodities sleeve. Use periodic rebalancing rules so profits on a rising silver price are trimmed back to target weight. Consider pairing with gold to reduce volatility. For CHF-based investors, check that any mandates or ETPs used fit risk tolerance and liquidity needs across market conditions.
How Swiss Investors Can Get Exposure
Access routes include ETPs on SIX Swiss Exchange, global bullion funds, futures via a Swiss broker, and physical coins or bars from regulated dealers. Each route differs on costs, storage, and tracking error. For many, exchange-traded products offer better liquidity and pricing transparency than retail physical purchases, which often carry wider spreads in stressed markets.
Silver trades globally in USD, so CHF returns also reflect USD-CHF moves. Some ETPs offer currency-hedged share classes, reducing FX noise but adding fees. Investors who buy USD-denominated funds may accept currency drift or use simple forward hedges. Align the hedge ratio with investment horizon and tolerance for drawdowns beyond the silver price itself.
Compare total expense ratios, spreads, and any custody or storage fees. Physical silver may incur VAT in Switzerland, while exchange-traded exposure typically does not. Many private investors’ capital gains on securities are often tax-free, but wealth tax applies. Confirm specifics with a tax adviser and ensure storage solutions meet insurance and audit requirements.
Outlook: Scenarios and Watch-List for 2026
Sustained growth in solar installations, grid modernization, and electronics tied to AI data centers can keep demand firm. If mine supply lags and inventories thin further, the silver price could build a higher trading range. Policy incentives for renewables would reinforce this path, as would lower real yields that support precious metals broadly.
After a parabolic move to $117.69, a multi‑month range is plausible while the market digests gains. Sideways trade could relieve positioning extremes and let supply respond. In this setup, buying pullbacks into support zones may be attractive. For context, recent broker commentary also flags consolidation risks XTB Trading News.
A quicker mine response, improved scrap flows, or a stronger USD would pressure the silver price. If real yields rise on sticky inflation or slower rate cuts, precious metals could re-rate lower. Watch for easing solar growth or substitution efforts in PV manufacturing. Clear stops and smaller position sizes can limit damage if the trend turns.
Final Thoughts
The silver price reached a record as solar demand, safe-haven interest, and a supply gap aligned. For Swiss investors, the key is to treat silver as a high-beta metal with drivers that span macro and industry. Use clear position sizing, consider pairing with gold, and review whether CHF-hedged exposure suits your goals. Expect wider swings into 2026 as inventories stay tight and momentum remains active. Track the gold-silver ratio, real yields, and solar installation data. Plan entries in stages, set disciplined exits, and avoid overconcentration so gains from this rally are protected if conditions change.
FAQs
Why did the silver price hit a record high?
A mix of safe-haven buying, a softer dollar, and rising industrial use pushed prices up. Solar panels consume significant silver, while supply growth has lagged. Investors also rotated into real assets as gold made new highs, boosting silver’s higher-beta move and drawing momentum flows to extend the rally.
Is the silver price overextended given the gold-silver ratio?
The ratio has dropped to a multi‑year low, signaling stretched relative performance for silver. That does not guarantee a peak, but it often precedes consolidation. Use the ratio with positioning and yield data to judge risk. Consider reducing oversized positions or setting tighter stops after sharp rallies.
How can Swiss investors gain exposure to silver efficiently?
Consider ETPs on SIX Swiss Exchange for liquidity and pricing transparency. Futures via a Swiss broker suit active traders. Physical bars and coins are options but can carry VAT and wider spreads. Decide on CHF hedging, compare total costs, and choose products that match your risk tolerance and time horizon.
What could push the silver price lower in 2026?
A stronger USD, higher real yields, faster mine supply, or softer solar installations could weigh on prices. Positioning unwinds can also trigger sharp drops. Watch policy shifts on renewables, inventory data, and bond markets. Manage risk with staged entries, clear stop levels, and modest position sizes.
Disclaimer:
The content shared by Meyka AI PTY LTD is solely for research and informational purposes. Meyka is not a financial advisory service, and the information provided should not be considered investment or trading advice.
